Lithia Motors (LAD)

Change in Time and Form of Distribution.The timing of a distribution of the
Deferral Account may not be accelerated except as set forth in Section 4.2 or
except as permitted under Rule 409A of the Code. Any change which delays the
timing of distributions or changes the form of distributions may only be made
by a written agreement signed by the Company and the Executive and only if the
following requirements are met:

2.3.1Any
election to change the time and form of distribution may not take effect until
at least 12 months after the date on which the election is made; and

2.3.2Other
than in the event of death, Disability (as defined under Rule 409A of the Code)
or Unforeseeable Emergency, the first payment or distribution with respect to
such election must be deferred for a period of at least 5 years from the date
such payment or distribution would otherwise have been made.

2.3.3Any
election related to a payment or distribution to be made at a specified time
may not be made less than 12 months prior to the date of the first scheduled
payment or distribution.